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ENVIRONMENTAL IMPACT STATEMENT EMC METALS AUSTRALIA PTY LTD

Executive Summary Nyngan Scandium Project

Report No. 773/05

ES-1

Executive Summary

INTRODUCTION

This Environmental Impact Statement (EIS)

has been prepared by R.W. Corkery & Co.

Pty. Limited on behalf of EMC Metals

Australia Pty Ltd (the Applicant) to support

an application for development consent for

the Nyngan Scandium Project (the

Proposal), located approximately 20km

west-southwest of Nyngan in Western NSW

(Figure A).

Figure A Locality Plan

A6 / Colour

Dated 29/03/16 Inserted 04/04/16

The Proposal would comprise construction

and use of the following.

Two open cuts within a surrounding

borrow pit with extraction of up to

80 000t per annum (tpa) of high grade

ore and up to 95 000tpa of low grade

ore over a period of 21 years.

A Processing Plant.

A Residue Storage Facility.

Ancillary infrastructure, including but

not limited to, a site access road,

evaporation pond, levee bunds, water

and power supply infrastructure etc.

The Proposal is classified as State

Significant Development in accordance

with Paragraph 5 of Schedule 1 of State

Environmental Planning Policy (State and

Regional Development) 2011 (State and

Regional Development SEPP) as it would

have a capital investment value of more

than $30 million.

Approval is required in accordance with

Division 4.1 of the Environmental Planning

and Assessment Act 1979 (EP&A Act). The

approval authority is the Minister for

Planning and Environment or their delegate.

THE APPLICANT

The Applicant, EMC Metals Australia Pty

Ltd, is a subsidiary of the Canadian-

incorporated Scandium International

Mining Corp. (SCY). SCY is a specialty

metals mining group with a worldwide

exploration and development focus on

scandium projects and market development,

as well as opportunistic development of

select specialty metals and rare earth

elements that may accompany scandium

resources. SCY’s primary operational focus

is on its scandium project holdings,

specifically the Nyngan Scandium Project

and the Honeybugle property in Australia

and the Tordal scandium property in

Norway.

The Proposal is 100% owned and operated

by the Applicant.

EMC METALS AUSTRALIA PTY LTD ENVIRONMENTAL IMPACT STATEMENT

Nyngan Scandium Project Executive Summary

Report No. 773/05

ES-2

OBJECTIVES OF THE PROPOSAL

The Applicant’s objectives in constructing

and operating the Proposal include the

following.

To mine the identified scandium

reserves in a safe and environmentally

responsible manner.

To maximise the recovery of the

identified scandium reserves through

efficient mining and processing

operations.

To minimise the consumption of

water, power and chemical reagents.

To operate the Proposal in a manner

that would minimise surface

disturbance and impacts on

surrounding residents and the local

environment.

To develop and operate the Proposal

in compliance with all relevant

statutory requirements.

To create a final landform that is

suitable for a post-mining land use

that would include a mixture of

agriculture, nature conservation and

water storage.

To achieve the above objectives in a

cost-effective manner to ensure

security of employment and the

continued economic viability of the

Applicant.

DESCRIPTION OF THE PROPOSAL

Overview

The Proposal would comprise the following

(Figure B).

Establishment of infrastructure

required for the Proposal, including a

Site Access Road, power and water

supply, levee bunds and

administration area.

Extraction of overburden and ore

material from two open cuts and a

surrounding borrow pit using

conventional free dig mining methods

on a campaign basis. Annual ore

production would be up to 80 000t of

high grade ore, and up to 95 000t of

low grade ore. Mining would be

undertaken for a period of up to

21 years.

Use of extracted overburden for the

construction of site infrastructure,

including the Residue Storage

Facility, levee bunds, haul roads and

water management structures.

Construction and use of a Processing

Plant, which would incorporate a run-

of-mine (ROM) Pad, feed preparation

circuit, high pressure acid leach plant

and associated infrastructure,

including boilers, reagent and

consumable stores, as well as residue

management systems to produce up to

approximately 45t per year of

scandium oxide. The scandium oxide

would be transported from the Project

Site in sealed containers with an

indicative capacity of less than 100L.

Processing would be undertaken for

the life of the mining operations,

namely 21 years.

Construction and use of a Residue

Storage Facility.

Construction and use of water

management structures, including a

Raw Water Pond, Event Pond,

External Decant Pond, Evaporation

Pond and a number of Sediment

Ponds.

Construction and use of a transformer

and electrical distribution network.

Construction of soil stockpiles (for

use in rehabilitation works).

Establishment of a Biodiversity Offset

Area.



Report No. 773/05

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Figure B Project Site Layout

A4 / Colour

Dated 08/04/16 Inserted 11/04/16



Report No. 773/05

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Site Preparation

The following activities would be

undertaken in preparation for mining

operations and the construction of the

Processing Plant and other infrastructure.

Survey, mark out and fencing of

disturbance areas.

Construction of the Site Access Road,

internal roads and intersection of the

Site Access Road and Gilgai Road.

Construction of the Processing Plant,

workshops, offices and associated

infrastructure, including a high

voltage electricity line and water

supply pipeline.

Removal of vegetation and stripping

of soil.

Mining Operations

Ore and overburden would be extracted

from two open cuts and a borrow pit as

follows.

Total area .................................38.2ha.

Depth

– East Pit .............................. 45mbgl.

– West Pit ............................. 50mbgl.

– Borrow Pit ......................... 15mbgl.

Following removal of vegetation and soil

material, mining operations would

commence with the removal of overburden

using a front-end loader and bulldozer.

Open cut mining operations would then

remove ore material in thin layers using a

front-end loader or excavator. Annual ore

production would be up to 80 000t of high

grade ore and 95 000t of low grade ore for a

period of 21 years.

The Applicant does not anticipate that drill

and blast extraction methods will be

required.

Processing Operations

Ore material would be processed within the

on-site Processing Plant, which would

include the following components.

A ROM Pad for stockpiling and

blending of ore.

A Feed Preparation Circuit for

physical preparation of ore material.

A Leach Preparation Circuit for

preheating and preparation of the ore

slurry.

A High Pressure Acid Leach Circuit

where the contained scandium would

be transferred from the ore to the

leach solution.

A Counter Current Decant Circuit

where the scandium-bearing leach

solution would be removed from the

ore slurry.

A Solvent Extraction Circuit where

the leached scandium in solution

would be transferred to an organic

solvent.

A Scandium Oxide Precipitation

Circuit where the scandium would be

precipitated from the organic solvent

and converted to scandium oxide.

A Residue Preparation Circuit where

the residue or tailings would be

neutralised and thickened prior to

being transferred to the Residue

Storage Facility.

The anticipated annual production would be

approximately 45t of scandium oxide per

year.

The Processing Plant would also include a

range of ancillary infrastructure, including

the following

Reagent stores.

An LPG-fired boiler.

A cooling tower.

A reverse osmosis plant.



Report No. 773/05

ES-5

Water management structure.

Workshops.

Administration offices.

Residue Management

Residue would be pumped to the Residue

Storage Facility, where the solid and liquid

fractions would then be permitted to

separate. The liquid fraction would be

pumped to the External Decant Pond for

reuse within the Processing Plant.

The Residue Storage Facility would be an

engineered, lined facility that would comply

with the design criteria of the Dams Safety

Committee of NSW and the Environment

Protection Authority’s Draft Environmental

Guidelines: Solid Waste Landfills.

Water Management

The Applicant would source required

operational water from the existing Nyngan

to Cobar Pipeline. That water would be

subject of the relevant Water Access

Licence and would be supplied under a

commercial arrangement with the Cobar

Water Board.

Levee bunds would be constructed around

the proposed areas of disturbance, with the

crest of the bund approximately 1m high

above the modelled height of a 0.1% (1 in

1 000 year) Annual Exceedance Probability

storm event.

A range of water management structures

would be constructed within the bunded

areas to ensure appropriate separation of

clean, dirty and contaminated water. No

surface water would be discharged from the

Project Site.

Transportation Operations

The Project Site would be accessed via the

Barrier Highway and Gilgai Road, with the

vast majority of vehicles accessing the

Project Site from the east.

An assessment of the intersection between

the Barrier Highway and Gilgai Road

determined that the sight distance from the

intersection along the Barrier Highway is

560m to the east and 200m to the west.

The Applicant would construct an

intersection between Gilgai Road and the

Site Access Road in accordance with

Austroads Guide to Road Design – Part 4A:

Un-signalised and Signalised Intersections

to the satisfaction of Bogan Shire Council.

Finally, the Applicant anticipates that the

Proposal would result in up to 60 light

vehicle movements (30 return trips) per day

and 10 heavy vehicle movements (5 return

trips) per day.

Hours of Operation

The Applicant would undertake mining

operations on a campaign basis

approximately 3 times per year. Mining

would typically be undertaken 7 days per

week between 6:00am and 6:00pm, with a

period before and after those times.

Processing operations would be undertaken

24-hours per day, 7 days per week.

Life of the Proposal

The Applicant proposes to undertake

mining operations for a period of 21 years,

with a period prior to mining operations

commencing for financing and construction

operations and following mining operations

for rehabilitation and mine closure

operations. As a result, development

consent is sought for a period of 26 years.



Report No. 773/05

ES-6

Employment and Economic Contribution

The Applicant anticipates that it would

require the following full time equivalent

(FTE) personnel to operate the Proposal.

Construction – Approximately

60 FTE positions.

Ongoing operations – Approximately

75 FTE positions

Additional employment would also be

generated for contract campaign mining

operations, contract truck drivers and

service providers.

The Applicant anticipates that the Proposal

would contribute approximately

$12.4 million per year to the local and

regional economy, and approximately

$39.0 million per year to the State and

national economies.

Final Landform and Land Use

The final landform would comprise the

following.

Two bunded and fenced open cuts

within a revegetated borrow pit with

side slopes of 1:3 (V:H) or less.

A free draining, covered and

revegetated Residue Storage Facility.

A shaped, covered and revegetated

Low Grade Stockpile with slide

slopes of 1:3 (V:H) or less

A generally flat Processing Plant Area

with all infrastructure not required for

the final land use, including the levee

bunds, removed.

Two water storage dams, namely the

Event Pond and Sediment Pond, with

all other water storages removed.

The Site Access Road would remain for the

final land use. Infrastructure within the

services corridor not required for the final

land use would be removed.

The proposed final land uses for the Project

Site would include agriculture, nature

conservation and water storage.

PLANNING CONTEXT

Planning Instruments

The Project Site is situated within land

zoned as RU1 – Primary Production under

the Bogan Local Environmental Plan 2011

(Bogan LEP). Open-cut mining is identified

as permissible with consent within this

zone.

The Proposal would be developed and

operated in accordance with a number of

State planning instruments, namely:

SEPP (State and Regional

Development) 2011;

SEPP (Mining, Petroleum Production

and Extractive Industries) 2007;

SEPP (Infrastructure) 2007; and

SEPP 33 (Hazardous and Offensive

Development).

The EIS addresses each of the above

documents together with the Bogan LEP.

Approvals Required

In addition to development consent, the

Applicant anticipates the following

approvals, licences and leases would be

required.

An Environment Protection Licence

issued under the Protection of the

Environment Operations Act 1997.

A Mining Lease issued under the

Mining Act 1992.

Water Supply Works and Use

Approval and Water Access Licence

issued under the Water Management

Act 2000.



Report No. 773/05

ES-7

A Section 138 Permit issued by the

Bogan Shire Council under the Roads

Act 1993, for construction of the

intersection of the Site Access Road

and Gilgai Road.

An approval from the NSW Dams

Safety Committee for the design and

construction of the Residue Storage

Facility.

A high voltage connection agreement

with Essential Energy under the

Electricity Supply Act 1995.

ENVIRONMENTAL FEATURES SAFEGUARDS AND IMPACTS

The components and features of the existing

environment within and surrounding the

Project Site have been studied in detail and

the Proposal has been designed to avoid or

minimise impacts on that environment. A

brief overview of the main components of

the surrounding environment, the proposed

safeguards and the assessed level of impact

are set out in the following sections.

Air Quality

Ramboll Environ determined that the

Proposal would not result in an exceedance

of the relevant deposited or suspended

particulate matter assessment criteria at any

surrounding residences as a result of the

Proposal. In addition, the Proposal would

not result in significant greenhouse gas

impacts. Furthermore, taking into

consideration the Applicant’s commitment

to install a range of emission control

devices to ensure compliance with the

Clean Air Regulation, Ramboll Environ

determined that the Proposal would not

result in adverse air quality impacts

associated with the proposed processing

operations.

Ecology

The Proposal would result in the

disturbance of approximately 9.3ha of

Poplar Box Gum-barked Coolibah

White Cypress Pine shrubby woodland

mainly in the Cobar Peneplain Bioregion

vegetation community. EnviroKey

undertook an assessment of the impacts

associated with the disturbance of this

vegetation, and determined that the

Proposal would not have a significant

impact upon this community, as it is well

represented in the immediate area.

EnviroKey further identified that:

five species listed under the

Threatened Species Conservation Act

1995 have the potential to occur

within the Project Site; and

one protected species listed under the

Environment Protection and

Biodiversity Conservation Act 1999

has the potential to occur within the

Project Site.

EnviroKey undertook significance

assessments for each of the observed

species or those with potential to occur and

determined that, with the implementation of

management and mitigation measures, the

Proposal would be unlikely to have a

significant impact on any identified species.

The Applicant would implement a

Biodiversity Offset Strategy to offset

vegetation clearing impacts, including a

proposed 64ha Biodiversity Offset Area

(Figure B). EnviroKey concluded that the

proposed Biodiversity Offset Strategy

would be consistent with the Office of

Environment and Heritage’s offsetting

principles.

Surface Water

Knight Piésold undertook an assessment of

the hydrology of the Project Site and

surrounds. In particular, the assessment

focused on the potential for flooding



Report No. 773/05

ES-8

associated with Whitbarrow Creek, located

to the south of the Project Site. The

assessment considered both a 1% (1 in

100 year) and 0.1% (1 in 1 000 year)

Annual Exceedance Probability (AEP)

Storm.

Knight Piésold determined that the

maximum flood height for a 0.1% AEP

event in the vicinity of the Processing

Plant/Residue Storage Facility Area and the

open cuts would be approximately

185.2m AHD and 184.5m AHD

respectively. As a result; the Applicant

proposes to construct levee bunds around

the Processing Plant/Residue Storage

Facility Area and open cuts of 186.6m AHD

and 185.6m AHD respectively, or more

than 1m higher than the anticipated

0.1% AEP flood level.

The levee bunds would exclude all surface

water from the proposed disturbance areas

and retain all potentially dirty or

contaminated water within the bunded area.

As a result, no adverse surface water

impacts are anticipated.

Groundwater

Ground Doctor determined that the

groundwater within the Project Site would

not be suitable for any common beneficial

use without prior treatment due to high

salinity. Impax also determined that the

Proposal is not anticipated to result in

groundwater drawdown at any surrounding

groundwater bores or drainage lines.

Noise

Operational and transport noise generated

by the Proposal would, assuming the

implementation of the nominated

safeguards and controls, not exceed the

relevant criteria at any privately-owned

residence.

Traffic and Transportation

The Site Access Road, the intersection of

the Site Access Road and Gilgai Road, and

the intersection of Gilgai Road and the

Barrier Highway would be upgraded to

accommodate Project-related heavy vehicle

movements. As a result, the Proposal would

not result in additional adverse traffic-

related impacts.

Aboriginal and Historic Heritage

No sites of Aboriginal heritage significance

were identified within the Project Site. One

site of potential historic heritage

significance was identified but would not be

disturbed by the Proposal.

Visual Amenity

Based on the relative isolation of the Project

Site and the proposed landscape and visual

amenity related controls, the Proposal

would not impact significantly on local

visual amenity.

Soils and Land Capability

Given the establishment of soil

management procedures and safeguards, the

Proposal would not result in significant soil

and land capability impacts.

PROPOSAL EVALUATION AND JUSTIFICATION

The Nyngan Scandium Project has been

evaluated and justified principally through

consideration of its potential impacts on the

environment and potential benefits to the

local and wider community.

An evaluation of the Proposal has been

undertaken by firstly re-assessing the risks

posed to the local environment by Proposal-

related activities following the

implementation of all operational controls,

safeguards and/or mitigation measures, and



Report No. 773/05

ES-9

secondly through consideration of the

principles of ecologically sustainable

development.

This evaluation has found that, with the

implementation of the proposed operational

controls, safeguards and/or mitigation

measures, the residual risk posed by each

potential environmental impact has been

reduced to either moderate, low, or as low

as reasonably practicable, and therefore

acceptable.

Further, the design of the Proposal has

addressed each of the sustainable

development principles, and on balance, it

is concluded that the Proposal achieves a

sustainable outcome for the local and wider

environment.

The Proposal and associated activities have

been assessed in terms of a wide range of

biophysical, social and economic issues.

Potential residual impacts can be justified in

terms of the positive economic and social

benefits to the local surrounding towns,

villages and regional centres and the Bogan

and surrounding Local Government Areas.

CONCLUSION

The Proposal has, to the extent feasible,

been designed to address all issues raised by

the local community and all levels of

government, as well as the principles of

ecologically sustainable development. The

Proposal provides for the extraction of a

valuable State-owned resource that would

facilitate the development of new and

innovative products, including wider use of

aluminium – scandium alloys and fuel cells.

The Proposal would also result in the

creation of local employment and

expenditure within the regional economy.

The socio-economic impacts of the

Proposal are considered to be positive.

Finally, the post-mining landform would

result in the continuation of the existing

land use, namely agriculture, as well as

providing areas for nature conservation and

water storage.

In light of the conclusions included

throughout this Environmental Impact

Statement, it is assessed that the Proposal

could be constructed and operated in a

manner that would satisfy all relevant

statutory goals and criteria, environmental

objectives and reasonable community

expectations.



Report No. 773/05

ES-10

Project Summary

Page 1 of 2

Project Component Summary of the Proposal

Mining Method Open cut mining using free dig techniques within two open cuts and a borrow pit with a combined area of 38.2ha and a maximum depth of approximately 50mbgl.

Mining would be undertaken on a campaign basis approximately three times per year.

Resource Measures and indicated – 12Mt at 261ppm scandium.

Disturbance Area Approximately 145ha, comprising:

9.3ha of Benson ID 103 – Poplar Box – Gum Coolabah and White Cypress Pine Shrubby Woodland mainly in the Cobar Peneplain Bioregion; and

135.7ha of exotic vegetation.

Annual Ore Production Up to approximately 80 000tpa of high grade ore and 95 000tpa of low grade ore.

Mine Life Approximately 21 years for mining operations, with an additional 2 years for financing and construction and 2 to 3 years for rehabilitation for a total Proposal life of 26 years.

Total Resource Recovered

Approximately 1.5Mt.

Processing Scandium would be extracted using high pressure acid leach and solvent extraction to produce up to 45t of scandium oxide per year.

Management of Overburden

Overburden would be used to construct site infrastructure, including the Residue Storage Facility, levee bunds and water storages.

General Infrastructure (see Figure B)

General infrastructure would include the following.

Site Access Road and intersection with Gilgai Road.

Two open cuts and a borrow pit.

A Processing Plant Area incorporating the proposed Processing Plant, reagent storage areas, water storages and hardstand areas.

A Residue Storage Facility.

Internal roads, including an elevated haul road.

Electricity supply and distribution network.

Ancillary infrastructure, including offices, workshops, hydrocarbon stores, ablution and waste water treatment facilities and hardstand areas.

Product Transport Scandium oxide would be transported from the Project Site in small containers with an indicative capacity of less than 100L.

Water Management Operational water – sourced from the Nyngan – Cobar Pipeline under licence.

Potentially contaminated and sediment-laden water – retained on-site.

External flood water – excluded by levee bund with a crest approximately 1m higher than the modelled 0.1% (1 in 1 000 years) storm event.

Workforce Approximately 60 personnel during construction and 75 during operation.



Report No. 773/05

ES-11

Project Summary ( C on t ’ d )

Page 2 of 2

Project Component Summary of the Proposal

Hours of Operation Land preparation and rehabilitation – daylight hours, 7 days per week.

Mining – 6:00am to 6:00pm, 7 days per week.

All other activities – 24-hours per day, 7 days per week.

Capital Investment Value

Approximately A$124.4 million.

Final landform / land use

Open cuts – final void / water storage.

Borrow Pit and Low Grade Stockpile – nature conservation (woodland).

Residue Storage Facility – free draining landform / nature conservation (grassland).

Event and Sedimentation Ponds – water storage.

Remaining disturbed areas – consistent with current landform / agriculture.



Report No. 773/05

ES-12

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